How Do I Calculate TDS for a Salary with a Yearly Bonus? Need Help!

TDS Calculation Assistance Needed

I need your help with TDS calculation under two scenarios.

One of my employees is eligible for a yearly guaranteed bonus of Rs. 2 Lakhs, for which he should work continuously for a year. This eligibility becomes effective this month, and it is the first month of eligibility. Along with this, his monthly gross salary is Rs. 1 Lakh. The employee wants the total amount to be credited to his account as salary, which would amount to Rs. 12 lakhs per annum, to avoid higher TDS deductions. Therefore, the management has asked me to provide them with the calculation for Rs. 14 lakhs per annum under one scenario.

TDS Calculation for Rs. 12 Lakhs + 2 Lakhs Variable

This is where I'm getting confused about what the actual calculation would be. Please help me with this.

Hi Amal, TDS will be calculated from 1st April to 31st March of every year. If he joined in the month of Feb '18, then you need to calculate Feb & March salary for this year's IT, and the balance 10 months will be calculated in the next year. If you are paying a bonus after one year, then you need to consider the bonus amount in the next year as his earnings.

TDS will be calculated considering other provisions of the act, for example, HRA, 80C savings, medical insurance, housing loan, etc.

Best Regards, Praveen Bhosale [Email Removed For Privacy Reasons]